January 15, 2016

Partnering for Results

Don’t assume you have to go it alone when investing your time, money, and talents to get results with your philanthropy. It’s likely other donors are working on similar goals. In fact, right this minute, they may be funding similar work in neighboring places or supporting efforts that could amplify your results.

So, how do you find potential partners? What kinds of relationships might you forge? While Warren Buffett was willing to entrust the Bill and Melinda Gates Foundation with the lion’s share of his net worth, most donors will likely want more influence over how their philanthropic dollars are spent.

This guide helps you assess the benefits and risks of working with partners, and offers an assessment to help you decide what type of collaboration—if any—might be the best fit. Benefits of Partnering Among the many reasons to consider partnering, here are some of the biggest benefits:

  • More money: By partnering, you can attract more funding for causes and strategies you care about.
  • Shared expertise: A partnership may give you access to new expertise—like issue-area know-how—and allow you to share your own unique knowledge with others.
  • Strength in numbers: A chorus can sing more loudly than a soloist. The increased visibility you gain from partnering may attract new donors or more media attention and help you broadcast your message more widely.
  • Increased efficiency: When you pool your resources, you have the opportunity to establish common processes that will save time (think: researching grantees, evaluating results, publishing research, and so on.)

Risks of Partnering

But partnering is not without its own set of risks. Be sure to factor these pitfalls into your decision on whether to pursue a partnership and, if yes, how you would like to structure it:

  • Who’s the boss: Partnering will likely mean that you give up some control, autonomy, or ownership over strategy and implementation.
  • Process snarls: More people and/or organizations can lead to inefficiency or complexity in making decisions or communicating.
  • Potential delays: Cultivating and negotiating relationships takes time and may slow you down.
  • Matchmaker, matchmaker: It may be difficult to find willing partners with similar goals.
  • Quid-pro-quo: A partnership may come with strings attached, creating informal obligations or requiring you to support causes you don’t care about.

Ways of Partnering

Now that you have thought through some of the decisions that will drive your partnership preferences, , take a look at this spectrum of partnership models to see what might be the best fit:

  • Alliance: Formed primarily to exchange ideas, raise awareness, and create a broad strategy for change. Individual funders retain control over investment decisions.
  • Example: Partnership for Higher Education (PHEA): To support development in Africa, 7 foundations—Carnegie, Ford, Hewlett, Rockefeller, and others—formed PHEA.
  • Results: Between 2000 and 2010, PHEA committed $440 million to build capacity at African universities. The scope of this effort has raised the profile of African education and attracted significant investment by other leading funders. The initial $100M investment was actually renewed and increased in 2005.
  • Also check out:
  • Youth Transitions Funder Group
  • Ask yourself:
  • Do you want to be able to approve all grants and give money directly to recipients?
  • Are you clear on the purpose, grantees, interventions, and funding amounts you wish to award?
  • Matching or incentive funding: One or more funders create a pool of matching or prize funding. In the process, the funders create incentives for others to contribute.
  • Example: Social Innovation Fund (SIF) at the Corporation for National and Community Service: In 2010, the U.S. government conducted an open competition for funders addressing 3 areas of need. It awarded 11 “SIF intermediaries” grants of $1-10 million. These intermediaries must make grants of at least $100,000 to community-based nonprofits. Both intermediary and grantee must match funding dollar-for-dollar.
  • Results: $50 million in federal funding will generate $200+ million in funds for SIF-related projects.
  • Also check out:
  • Changemakers
  • Robert Wood Johnson Foundation Local Funding Partnerships
  • Ask yourself:
  • Are you looking to significantly expand your reach in a particular area?
  • Do you have the resources to fund organizations working in that area? Or, if you accept prize funding, can you uphold your end of the bargain?
  • Co-investment: One funder raises money from others to support a specific nonprofit’s plan with clear goals.
  • Example: Edna McConnell Clark Foundation (EMCF): EMCF created the Growth Capital Aggregation Pilot to help 3 high-performing organizations raise funds and boosted their impact. Through this pilot, EMCF spent 6 months helping grantees create strong 5-year growth plans, which it used to recruit other funders.
  • Results: Within 1 year, 19 partners joined, committing $120 million over 5 years, of which EMCF put up $39 million. EMCF coordinates quarterly reports, conference calls, and an annual meeting for partners. Nonprofits are building relationships to retain funders.
  • Also check out:
  • New York City Acquisition Fund
  • Ask yourself:
  • Are you willing to follow investment recommendations set forth by others?
  • How much input do you want into day-to-day decisions? Do you want to have more, less, or similar control over decisions as your partners?
  • New Organization: Funders create and co-invest in a new separate entity. That new organization gives grants or operates programs.
  • Example: Charter School Growth Fund (CSGF): CSGF’s lead funder, the Walton Family Foundation, encouraged other charter school funders to outsource a portion of their portfolio to CSGF. CSGF’s rigorous grantee selection process allows funders to support high-performing charter management organizations (CMOs) without duplicating due diligence efforts.
  • Results: Since 2005, CSGF has raised $150 million and provided grants to more than 25 CMOs. Currently, 9 funders contribute to CSGF. Many also make side-by-side grants with CSGF, providing additional funding to CMOs.
  • Also check out:
  • ClimateWorks
  • Energy Foundation
  • Living Cities
  • Ask yourself:
  • Would you consider forming a legally independent organization or a new organization hosted by your organization?
  • Fund the Funder: Funders invest in another funder with strong expertise in a content area. The recipient funder re-grants money to nonprofits.
  • Example: Skillworks: In 2003, the Boston Foundation, together with 15 other local, national, and corporate foundations, the City of Boston, and the state of Massachusetts, launched Skillworks to improve workforce development in MA. A Boston Foundation program officer with a strong vision and extensive contacts leads this donor-advised fund.
  • Results: The Skillworks partnership has invested $25 million to improve workforce development in MA.
  • Also check out:
  • Pew Charitable Trusts
  • Ask yourself:
  • Are you comfortable with someone else making the final decision over who to fund?

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